WSJ: States Struggle With High ‘Underemployment’ Rates Amid Joblessness

Unemployment figures don’t tell the whole story. The unemployment rate doesn’t count the underemployed, part-time workers who want to work full time, or the unemployed who have given up looking for work, The Wall Street Journal reports.

The underemployment rate, or U-6, is especially high in California and Nevada, which are suffering high unemployment and depressed home prices.

California’s average unemployment rate from July 2011 to June 2012 was 11.2 percent, while its underemployment rate was 20.3 percent. California has the most part-time workers who would rather work full time, according to The Journal, which is troubling because California is such a large part of the nation’s economy, accounting for about 13 percent of the gross domestic product.

Nevada had an average unemployment rate of 12.3 percent and an underemployment rate of 22.1 percent, The Journal reports, while Rhode Island had an unemployment rate of 11.2 percent and an underemployment rate of 18.9 percent.

The underemployment rate in Nevada “spiked throughout the recession and it’s at elevated levels, even though it has started to come down a little bit,” Leanndra Copeland, an economist for the state of Nevada, tells KTVN in Nevada. “We still see it at high levels.

“We have seen some encouraging signs, recently,” Copeland says. “Like, the private-sector job growth has had year-over-year gains for about a year and a half.”

The entire country had an 8.5 percent average unemployment rate over the past year and a 15.3 percent underemployment rate.

Some states with unemployment rates better or close to the national rate have much worse underemployment rates. For instance, Massachusetts has an unemployment rate of 6.6 percent and an underemployment rate of 13.5 percent.

One bright spot is that underemployment rates in many states have declined, according to the Journal.